Early signs of returning confidence as sales volumes rise in the regions

BY JEN BAIRD, REINZ CEO

The Real Estate Institute of New Zealand’s (REINZ) May 2023 figures show an increase in sales counts in some parts of the country while buyers and sellers in other parts continue to wait.

REINZ Chief Executive Jen Baird says as we head into the winter months, we are seeing glimpses of positivity, especially in the regions following the Reserve Bank’s announcement of easing loan-to-value restrictions and the stabilising of interest rates.

Nationally, the May 2023 median price decreased 8.2% year-on-year to $780,000 but saw no change month-on-month. The median days to sell has risen to 49 days for May 2023 – up 6 days compared to May 2022, and up 3 days from 46, when compared to April 2023. New Zealand excluding Auckland, saw a decrease in the median price of 6.5% to $685,000 and a 2.1% decrease month-on-month.

In the regions, Nelson had the biggest median price rise this month at 2.7% year-on-year and 6.9% month-on-month to $770,000. The West Coast saw another increase with a month-onmonth rise of 3.1%. Two districts reached record median prices: Grey District with a 18.7% increase year-on-year ($400,000) and Waitomo District taking top spot with a 53.4% increase year-on-year ($655,000).

At the end of May, the total number of properties for sale across New Zealand was 26,685, up 250 properties (0.9%) year-on-year, and down 6.8% month-on-month. New Zealand, excluding Auckland, was also up from 15,799 to 17,015, an increase of 1,216 properties annually (+7.7%). Month-on-month, inventory decreased 7.3%.

“Inventory levels look to have stabilised with only a slight increase in stock levels. We have seen low levels of property coming to market across the country for much of this year and, as sales volumes are back at more normal levels, we may be seeing the beginning of a shift in the balance of supply vs demand,” says Baird.

The total number of properties sold across New Zealand in May 2023 was 5,752, down from 5,776 in May 2022 (-0.4%), and up 30.0% month-on-month. New Zealand, excluding Auckland, sales counts increased by 1.4% year-on-year and 26.7% month-on-month.

Seven regions, Northland, Auckland, Waikato, Wellington, Tasman, Marlborough and Southland all had a 30% increase or more in sales volumes month-on-month, with Marlborough topping the list with 66.7% in sales.

“We do need to consider the typical changes that occur from April to May when interpretating the monthly sales count. Of those seven regions, it was only Marlborough, Tasman and Wellington that well exceeded what would typically be expected in May 2023 based on the April 2023 sales counts.”

“Northland and Waikato had a slightly larger increase in sales count from last month than is typical whereas the Auckland and Southland month-on-month movements in sales count were less than what typically happens in those regions when moving from April to May,” comments Baird.

“We’ve heard from salespeople that most sellers are meeting the market while others are potentially holding tight on selling at a higher sale price, particularly if they had bought in the peak of the market. These tend to be the properties that stay on the market longer. Easing of loan-tovalue restrictions, commentary around peak inflation and a renewed confidence is seeing more first home buyers seek out opportunities,” states Baird.

Nationally, new listings decreased by 18.1%, from 8,983 listings in May 2022 to 7,359 listings in May 2023. Compared to April 2023, listings increased by 3.0% from 7,142. For New Zealand excluding Auckland listings decreased 17.4% year-on-year from 5,801 to 4,792. Auckland’s listings were down 19.3% from 3,182 to 2,567 year-on-year, but up 2.0% on April 2023.

The REINZ House Price Index (HPI) for New Zealand which measures the changing value of residential property nationwide showed an annual decrease of -11.2% for New Zealand and a -10.0% decrease for New Zealand excluding Auckland.